US President Donald Trump is preparing to impose sweeping new economic sanctions on Iran and its trading partners, escalating pressure on Tehran as the six-month-old Middle East conflict continues.

US Treasury Secretary Scott Bessent is expected to provide details of the measures today. The administration has warned allies and China to support the campaign, which is aimed at further isolating Iran economically.

Iran has threatened to retaliate by disrupting oil exports from the Gulf if what it describes as an economic war continues. Any sustained disruption could have significant consequences for global energy markets because the Gulf and Strait of Hormuz are major routes for international oil shipments.

The escalation comes after weeks without direct military strikes between the main combatants, although there has been little progress towards meaningful negotiations to end the conflict.

Thousands of people have been killed since the fighting began, with Iran and Lebanon suffering some of the heaviest casualties. The conflict has also weakened Iran's conventional military capabilities and placed additional pressure on its economy.

With Washington preparing to intensify economic pressure on Tehran and Iran threatening to target Gulf oil exports, investors are closely watching for any disruption to global energy supplies and the broader economic fallout.

— BBC